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Investment Bankers as CEOs

I'd like to hear the thoughts of our members on the "trend" of appointing Investment Bankers as CEOs.

Answers

John Argo
Title: Consultant
Company: Independent Advisory Services
(Consultant, Independent Advisory Services) |

I find it concerning. When the go-to tools are M&A and financial engineering, real value creation--or lack thereof--tends to get obscured. The importance of innovation, market responsiveness, and deep understanding of market-specific risks becomes subordinated. This will dull competitive edges. Reducing talent diversification in the C suite will reduce competitiveness.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

I agree John! ....and the debate about stakeholder vs shareholder tends to get skewed to one side. Especially when Private Equity (even so called "activist" investors) are involved where it is mostly all about the exit.

McGavock Dickinson Bransford
Title: Managing Director
Company: Mid-Market Securities, LLC
(Managing Director, Mid-Market Securities, LLC) |

As an investment banker, I thought that I'd weigh in with another perspective. Of course, as always, the individual matters more than his/her prior occupation.

Naturally, people see the world through the lens they're most accustomed to using, but it would be a professionally unseasoned person who'd only apply the limited managerial tools of financial engineering and M&A for growth, while neglecting to put priority on value creation, product and service quality, building a more effective distribution system, sales force, etc.

And, some investment bankers such as myself bring additional background experiences and skills -- in my case I have been a VP marketing and a VP corporate strategy, too. Again, the question applies to the individual, not the profession.

By the way, Amazon CEO Jeff Bezos began his career on Wall Street, not investment banking per se, but writing computer programs, then later moved into finance with an investment company. Certainly, he started Amazon utilizing many of his investment industry skills.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

McGavock, I did NOT intend to generalize (although reading again my original question, I admit that it had the risk of being interpreted that way) and my apologies if my question seemed that I was. I recognize that individuals have other backgrounds that they bring into the position (sales for example).

What is interesting about your example is that Bezos is well known for his love-hate relationship with Wall Street and it's obsession with short term metrics....well, profits!

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I agree with John's comments. My other concern not mentioned is the lack of people skills I have seen. I have seen multiple instances where, decisions fail to take into account the motivation of people to achieve objectives.

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